Starbucks loses dispute over South Korean chain's 'Starpreya'

SEONJIN CH, Seattle Post-Intelligencer

By SEONJIN CHA, BLOOMBERG NEWS

Updated 10:00 pm, Wednesday, October 11, 2006

Elpreya's chairman insists its brand is named after a goddess and "has nothing to do with Starbucks." The Patent Court of Korea agreed and previously had rejected a claim by the Seattle-based retailer that the companies' logos are too alike.

Starbucks Corp. lost a trademark dispute with a South Korean company that sells coffee from roving outlets in trucks.

The Patent Court of Korea on Sept. 20 dismissed a claim that Elpreya Co.'s brand "Starpreya" should be canceled because of confusion with the U.S. company's name, the court said in a ruling posted on its Web site Wednesday.

"We named our brand after northern Europe's goddess Preya, and it has nothing to do with Starbucks," Elpreya Chairman Kim Woo Ki said by phone in Seoul. While the South Korean company's logo is a woman's face within a circle of green, similar to Starbucks', the court last year rejected the Seattle-based retailer's claim that they are too alike, he said.

Starbucks is pushing into new markets as it tries to more than triple store numbers to 40,000 worldwide. The trademark tussle is not the company's first in Asia as Starbucks adds locations at a record pace to keep customers from buying coffees and lattes at Dunkin' Donuts Inc. and other chains.

The company won a trademark-infringement lawsuit in January in China, stopping Shanghai XingBaKe Coffee Shop Ltd. from using the name, which can be translated as Starbucks in English. It won another case in China last year and also has taken action in Japan.

After opening a first shop in South Korea in 1999, Starbucks has rolled out 177 outlets. Starbucks Coffee Korea, a joint venture between Starbucks and South Korea's biggest discount-store chain operator, Shinsegae Co., registered its brand and logo in South Korea in 1997, when it was established.

Elpreya, a Seoul-based company established in 1999, is operating a chain of about 40 coffee shops, mostly installed in small trucks so that they can be transported, Kim said. The company was named after the Norse goddess Freja, with the letters changed to ease pronunciation by Koreans, he said.

The South Korean court said the name of Elpreya wouldn't confuse consumers. The decision can be appealed to the country's Supreme Court.

In 2000, Starbucks' Japanese unit asked the Tokyo district court to stop Doutor Coffee Co. from using a logo it claimed infringed its copyright. Starbucks Japan Ltd. alleged the round, green symbol and block lettering above the entrance at 20 outlets of Doutor's Excelsior Cafe chain were too similar to its own sign. Tokyo-based Doutor later changed the color of its logo.

Starbucks hasn't said how soon it wants to have 40,000 outlets worldwide, a target disclosed Oct. 6 and a 10,000-store increase on the previous goal.

The company plans to enter four countries in the coming year -- Brazil, Egypt, India and Russia -- bringing the total to 40 overseas markets, said Martin Coles, head of Starbucks International.